Network-based shopping has steadily increased in recent years within the retail industry. Brick and mortar stores have suffered substantially as a result of this trend because of rent, costs, inventory of product, and staffing associated with maintaining the physical stores and loss of sales to online competition. One area where consumers are less likely to engage in shopping over the Internet is grocery stores. This is for a variety of reasons, such as consumers want their grocery products at the time that they shop for those products; and consumers like to see and feel perishable goods, such as produce and meat.
Yet, retail space for grocery stores is expensive for grocers that rely on small product profit margins and large sales volumes to sustain their businesses. Furthermore, the retail space and shelf space are not organized for efficiency in selecting items; rather, the retail space and shelf space is based on deals and fees paid by food manufactures to the grocers and based on psychological studies about product placement and behaviors of consumers while in the grocery stores. This creates an inefficient retail space that is significantly larger than it needs to be, but believed necessary to maximize store sales.
Furthermore, larger retail space requires more security to thwart theft and more store personnel to handle stocking the shelfs, cleaning the store retail space, and assisting customers.
As a result, grocers have not significantly altered their retail space or layout because they believe that their existing space and the in-person shopping model are necessities for doing business in the grocery industry with the customer.
Some grocers have introduced online shopping where customers order their items online and pick up their items already bagged at the store (with a substantial time lag between ordering and pickup experienced by the customers). But, this model appears to be directed at maintaining a customer base that is less inclined to shop in-person and is more interested in convenience. There has not been substantial growth in the online grocery shopping model and it has not decreased the grocers' retail spaces. Thus, the expense and inefficiencies of conventional grocery shopping at groceries has not substantially changed in the industry; in fact, the trend has been for even larger stores (mega stores).